Wednesday, July 9, 2008

Creating new market opportunities

These days, I spend a lot of time hanging out on the MIT campus to have a quiet time while missing my little girl Daine at home. I see many students also hanging out on campus. What a relief to feel that I am not the only lonely person here.

Today, I ran into a friend who's interning at a local high tech startup. "So... what do you do there?", I asked. She told me that she's working on this super-meta-physical crazy rocket science out of MIT lab related to detecting nuclear materials without having to open the casing, and she's helping them figuring out creating new market opportunities. Phew~~ So, I asked "what do YOU do there?". She said that she spends a lot of time trying to understand the isotopic composition of materials to see if the company's technology can be used in new applications. She reiterated the fact that she's a bit frustrated, because many compelling applications are constrained by the current state of proprietary technology.

Well, here's what I have to say....

Technology is good only as long as there's a strong market need. This sounds so niche, but this is the pitfall of many technology startups. They try to see how their original technology fits into new applications/markets. Quite often, the technology needs to adapt to the new market opportunity. So, what do I mean by this? When thinking about creating new market opportunities, you really need to understand where the big market is before getting into the technical due diligence. Why waste so much time (as a business person) to understand all the science while you can spend lots of productive time thinking about new applications? You really need to start with a premise "okay, my baby can detect something without opening". You don't need to understand the isotopic composition of materials to detect hazardous materials inside. By putting so many constraints in your original assumption, you might have thrown out at least tens of useful, promising market opportunities.

Work in a team to list out everything you can possibly list out. Innovating on ideas just cannot be done individually. I don't care how smart or creative you are. You just need to ask as many people as possible to aggregate as much information as possible. Criticize and ask questions. Give "stupidity grade", explore more, and pick the ones that seem most promising supported by a few facts (market size, regulations, tech trends, etc.)

Then, comes the technical diligence. If there are large market opportunities and interesting enough applications, can we build this product, given the current state of technology? I'm sure people much starter than me can figure out the technical aspect better, but the real question is how much capital, time, and resource? Given the infinite amount of all these, pretty much anything can be done unless the application is just too wacky. If the product cannot be built with "reasonable" capital, time, and resources, move on.

That's it. This is the innovation strategy 101. Now look back and think about reversing the above steps. What do you think?